Board gender diversity and innovation activities: Evidence from R&D investments in the UK

This study examines the relationship between board gender diversity and R&D investments in the UK. Also, the study goes deeper and examines whether the relationship between board gender diversity and R&D investments is affected by the female tenure in the board. Using a sample from the UK FTSE350 index between 2009 and 2018, the findings show that board gender diversity has a positive impact on R&D intensity. Importantly, we find that this relationship is not affected by the tenure of female directors. Therefore, this result alleviates the concern that long female tenure might lead to weak monitoring, thereby adversely impacting the relationship between gender diversity and R&D investments. The findings hold after using different proxies for gender diversity and after controlling for endogeneity. The study injects the literature with up-to-date evidence on the role of female directors in R&D investment in the UK where female representation in the board is still optional. Moreover, the findings of this study contribute to the merits of the tense debate on female representation in the board of directors. In this regard, given that the current regulations in the UK recommend, but do not oblige, board gender diversity, regulatory bodies (e.g., FRC) could take this issue into consideration for future governance reform. Furthermore, companies that are eager to maintain sustained innovation should pay close attention to gender diversity during the process of the directors' appointment.